Bethel residents may have to start paying sales tax on online purchases soon. Bethel City Council unanimously voted to join the Alaska Remote Sales Tax Commission, a state-wide organization that will help Alaskan cities collect sales tax on online purchases by their residents.
A 2018 U.S. Supreme Court decision declared that retailers are required to collect and remit sales tax for online purchases. However, many do not because of the burden of collecting a different sales tax rate and remitting it to each city.
Acting City Manager Bill Howell explained that the state-wide commission would serve as a directory for online retailers.
“The vendors will be able to go to one spot, and they’ll know what all our exemptions are. They’ll know what our sales tax rate is,” Howell said.
Not everyone is a fan of paying more taxes.
“I’ve heard from a couple people here in Bethel, saying we are already overtaxed,” said Mayor Perry Barr. “And the other concern is are the Elders going to be exempt, like we allow them to be exempt here in the City of Bethel by not having them pay city taxes? I think there’s already talk about that at the commission level.”
But Barr went on to say that his response is that those tax dollars would go back to the residents.
“Maybe hire more police officers, maybe cut down on our water/sewer rates,” Barr said. “I think it’s a great way for us to provide better services.”
Bethel becomes the 23rd member of the Alaska Remote Sales Tax Commission. Municipalities such as Juneau, Nome, and Toksook Bay have already joined.
Acting City Manager Howell says that joining the commission is the first step in a three-part process. The second will be sending a Bethel representative to help write the bylaws for the commission. The third will be to adopt the sales tax codes that the commission agrees on.
There would be some administrative fees that the city would have to pay to the commission, but Howell says the city could stand to gain hundreds of thousands of dollars in additional revenue from the online sales tax.